Role of NGOs, Corporate Sector & Other Agencies to Promote Youth Enterprise By Ferdaus Ara Begum Additional Secret

1. Role of NGOs, Corporate Sector & Other Agencies to Promote Youth Enterprise By Ferdaus Ara Begum Additional Secretary (R&P), DCCI June 07, 2011

2. Youth Enterprise (YE) One most suitable definition of YE could be: a person with practical application of enterprising qualities, initiative, innovation, creativity, and risk-taking into work environment (either in self-employment or employment in small start-up firms), using the appropriate skills necessary for success in the environment and culture. (By Francis Chigunta-Youth Entrepreneurship: Meeting the Key Challenges)

3. Who are Youth Enterprise (YE) Legal status of Youth differ for various purposes like marriage, voting rights, land rights, criminal offences & eligibility of military services or consent to medical services. Most of the international instruments & organizations for policy purpose accept quantitative definition Quantitative definitions also varies, according to ILO convention no 138, youth hood begins when a person reaches the age of 15 UN General assembly defined Youth between ages 15 and 24 while common wealth definition refers age category as 15-29 Bangladesh youth policy categorizes Young as 18-35 years

4. YEs Transformation YE goes through various work situation before finally embarking on entrepreneurship There are significant structural Differences in YE activities: Pre Entrepreneurs (age limit 15-19) Budding (age limit 20-24) Emergent (Age Limit 25-29) An YE can get maturity before he becomes adult Intergenerational Transformation YE also can graduate from informal to formal enterprise activities

5. Youth Population and Employment The Youth constitute one third of total population of Bangladesh SFYP has goals of creating gainful employment for at least 90 million young people. Bangladesh has constitutional obligation to give importance to the welfare of total population including youth community Between 2000 and 2015 over a billion young men and women will enter the labour force worldwide (Commonwealth website). So far statistics of YE is difficult (In Hong Kong-a research said 20% of the total is YE) Self employment is an option to make young people employed and fight against poverty

6. Demographic Dividend in Bangladesh-how the country can take benefit out of it Bangladesh is currently experiencing ‘demographic transition’ as a result of slower population growth. Even so entry of young population in the labor force will continue due to demographic factors. This demographic dividend will need to be properly harnessed. Life expectancy has increased from 46.27 years in 1974 to 66.60 years in 2007 Labour force(15+) growth rate as per LFS-2009 was expanding owing to the change of demographic structure, higher share of working group and rising female participation Economically active population was 49.5m in LFS 2006, increased to 53.7m in 2009 SFYF targeted the issue of Skill Development in view of producing quality labour and introducing ICT for implementation of Digital Bangladesh Being one of the most densely populated countries in the world, it is hardly surprising that land has become the scarcest factor of production in Bangladesh. All the above has created an enabling environment for YE

7. With the incredible change of Technology-YE can be the Champions of so many Green Sectors IT Out sourcing (RB-NRB Linkage) E-Commerce and Web Based project Graphic designs, Softwares and other related products Mobile Technology Media-Print, Electronic and Internet Tourisms Fashion Designing and Making Health and Health care Activation Companies Music, Dance, Choreography and other innovative sectors Different service sectors (CSR & ISR)

8. Repositioning of Skills In Bangladesh some 78 percent of the labor force is engaged in informal sector activities (agriculture and informal services). Agriculture alone employs some 48 percent of labor force, while its GDP share is less than 20 percent. More Investment, Policy Coherence in the agriculture is a must (e.g. Face Book Initiatives by the YE) Encouraging SMEs in the new sectors. Underemployment rate, calculated on the basis of number of hours worked per week, is high at 24.5 percent in 2006, increased to 28.7% as per LFS 2009 Unemployment rate among the young population in Bangladesh is higher than that in India and Vietnam

9. Youth unemployment rate (percent of total labor forces ages 15-24)

10. Importance of promoting YE Opportunities for employment for both self-employment and small start up business Bringing back the alienated and marginalized youth into the economic mainstream Help addressing some of the socio-psychological problems and delinquency that arise from joblessness Promoting innovation and resilience in youth Promoting the revitalization of the local community Young entrepreneurs may be particularly responsive to exploit new economic opportunities and trends Young entrepreneurship for both men and women can help developing skills and experiences that can be applied to many other challenges in life.

11. Why YE is not encouraging Youth faces problems of access to resources such as capital YE start their enterprises with low levels of initial capital YE has lower market value or inventory YE have to depend in simple tools or have almost no equipment Heavily dependent on local market, poor branding etc.

12. Government Policies for YE National Youth Policy of Bangladesh Vision 2021 with a target to graduate to MIC by 2021 SFYP has given importance on YE, TEVET Education Policy 2009 SME Policy 2005 etc What is required : In several other policies YE has been recognized which needs to be integrated with key macro economic policies Youth policies should have implementation mechanisms Enabling environment for Youth Enterprise to be framed Required institutional and policy support Need based National Skill Development Programme Repositioning and reengaging innovative YE

13. Comparison of KEI of Bangladesh as per SFYP (Mostrecent in top line, compared to 1995 bottom line for each group, Source SFYP and WB)

14. Role of NGO, Corporate sector and other organizations for YE NGOs are providing micro credit and playing an important role for Micro Enterprise development Nearly 20,000 NGO in different areas are working in Bangladesh of which some specially working for Children and Youth while some are working for entrepreneurship development A few of them are working for YE Development

15. Higher Private sector Investment-YE for Speed Presently Bangladesh’s 5-6 percent growth is underpinned by an average investment rate of 22-24 percent, implying an ICOR of 4. Assuming no increase in productivity over the present level, an 8 percent GDP growth will require some 32 percent investment rate while a 10 percent GDP rate will require a 40 percent investment rate. Private Investment needs to be increased to 32.5% by 2015 from the present level of 20.2%

16. Present Structure of employment in different sectors in 2009

17. Sectoral Growth

18. Changing pattern of sectoral employment in SFYP

19. Role of Corporate Sector for YE Development • Economies with dynamic manufacturing sectors have three characteristics: • Its share to GDP is 30% or more • Export and manufacturing sector performance tend to go hand in hand • Bangladesh like other Asian countries have successfully transformed from predominantly agrarian economies to manufacturing powerhouses –the main reason is that: • Changed Global system and Changed policy of Bangladesh has made Corporate sector more responsible for creating employment • Chambers as a conglomerate of private sector representative has been playing a vital role for entrepreneurship development and contributing for YE development

20. Role of Large Chambers • All 65 Districts in the country there are Chambers and all sectoral Association, 366 of them all are Members of the Apex Trade Body-FBCCI • FBCCI has taken a plan to create 3 million jobs when less than 1 million are created now • 2 Million added to the labour force every year • 1 million to absorb some of those now among the hidden or disguised unemployment

21. Actual situation • Only 6 lakhs find real jobs where they contribute to the economy in manufacturing, construction, mobile phone • 2 lakhs remain unemployed • 2-3 lakhs migrates • About 8 lakh a year are added to the disguised unemployment • A huge number of labour force remain underemployed • Chambers and Association can play a great role

22. SMEs can absorb a large pool of YE • About 96% of the industries of Bangladesh are from SMEs. • A DFID study(2003) revealed that there are about 6 million MSMEs in Bangladesh employing 31m people or 40% of the population 15 years or older. • Trade liberalization has encouraged more SMEs • Exports-the drivers of manufacturing growth but facing diversification challenge • New labour intensive export sector can give thrust to SME development • Due to high Domestic Demand new Import-substitute SME-led manufacturing venture can be encouraged • Women entrepreneurs can be encouraged

23. Constraints as identified by SFYP

24. Dhaka Chamber of Commerce & Industry-Pioneering in Business Transformation • DCCI is playing a vital role for Enterprise development • Contributing for employing more than 20 lac people • EDP by DCCI has been helping YE in Bangladesh Some other Services of DCCI for YE: • Business Policy Advocacy • Establishing Business Contacts • Business Documentations services, Business Plans, Project profiles, Consultancy, advisory services • Knowledge Centre • EDP Projects providing specialized services

25. Participants Category in the EDP & Training

26. Certificate Awarding Launching Ceremony of MLS IPSCM Certificate Course YE taking certificates from DBI

27. Young Visionaries-a milestone to support YE • Young Visionary 2010 Award

28. Bangladesh 2030 • DCCI believes Bangladesh can be one of the 30th largest economy by 2030 if some integrated strategy can be taken for implementation where Young Visionaries can contribute a lot • DCCI Identified seven strategic priorities: • Engaging on Skills • Overcoming the infrastructural deficit • New sectors, New Markets • Re-positioning Agriculture for growth • Urban strategy • Strategizing on regional connectivity • Sustainable adaptation of Climate Change

29. How 2030 will Look Like

30. On Going Project Activities for supporting Entrepreneurs

31. SPECIAL ACTIVITIES for YE SME Financing Fair 2009 DCCI Business Award 2008 • DCCI Business Award • International Business Conference • SME Financing Fair • Business Journalism Award • Vision Dialogue • Bangladesh 2030: Strategy for Growth • Women Entrepreneurship Development International Business Conference 2008

32. Junior Chamber of Commerce • Grow to Lead is the slogan of the Chamber • 60% of the Junior Chamber Members are YE and doing good • INNOVA- A Business Incubators to use shared resources to reduce costs

33. Women YE • The rapidly changing economy has forced women to venture out as entrepreneurs. • Although there are no concrete evidences of discrimination against women micro entrepreneurs, failure to provide collateral or guarantees reduces the likelihood of obtaining credit. • Further, lack of marketing skills and technological know-how also act as impediments to the growth of their businesses. • There are several factors impeding the growth of women micro entrepreneurs and the catalytic role played by the Non-Governmental Organizations (NGOs) in creating appropriate entrepreneurial environment. • There should be separate policies for supporting role in the process of entrepreneurship development among women.

34. Way forward • Entrepreneurship Development Policy • Updating the Youth Policy • Employment target of Vision 2021, SFYP and its implementation strategy • YE Company programme Courses • Corporate Mentorship-for diversity initiatives • Coherency and consistency in Modernizing Agriculture sector & Social education • Technology oriented and capital intensive service sector • Success stories of the YE • Branding Bangladesh Strategy 2030 • Formation of a national advocacy group

35. Contd… • A Single Agency for back-end and Front-end Link of related organization for YE development • Technology for encouraging innovative YE • School-based Entrepreneurship development • Seeds of Entrepreneurship can be implemented in partnership with government and local chambers • Junior Achievement Award can be introduced • Separate Budgetary allocation

36. Concluding Remarks • New Technology age has given us incredible opportunities for greater access to information and manipulation-YE can open a new hope and aspiration for a new generation Entrepreneurship Culture to reduce rapidly increasing unemployment • About 52 Universities in the country are producing a significant number of graduates but the appropriate skills are lacking which has failed to create new Job-placement • Practical opportunities to develop business relevant skills-National strategy should focus these issues • Youth Caucus in the Universities can lead a strong network of young people across the country to mobilize them to be a proud citizen with a new hope to be self-employed/Small business • A well designed nationally integrated YE Business Development policy with practical Action Plan is required. • Corporate Philosophy has changed a lot-Qualified New comers are always welcomed

37. Bangladesh Tapestry

38. THANK YOU